IBM is gearing to axe 3,900 jobs as part of an asset divestment exercise. The Company has been unable to achieve its cash target for the year.
The investors, however, it is reported, expected the number of job cuts to be higher. Right now, only about 1.5 per cent of IBM’s global workforce is affected.
Last year, IBM’s cash flow was merely $9.3 billion, way less than the target of $10 billion, owing to working capital requirements being much more than the Company had anticipated.
While the Company is all for taking full advantage of digitisation and automation to enhance efficiency, it is also committed to continue hiring for client-facing roles and in the areas of research and development.
Most of the job cuts will affect those who were on IBM payroll after its divestment from Kyndryl and post the spin-off of Watson Health. Post these job cuts, the Company intends to focus on areas of high growth.
While analysts had predicted that IBM’s fourth quarter earnings will be about $16.4 billion, the Company posted revenues of $16.69 billion, which is higher than expected, primarily due to the contribution of Red Hat, which IBM acquired in 2017.
